ALBANY -- An Albany bar owner pleaded guilty to a felony Wednesday under a plea agreement that settles a 12-count felony indictment related to charges he failed to pay more than $191,000 in state sales taxes.

It's unclear whether the guilty plea of Timothy Rankins, who has owned several bars in the city, will result in any jail time. His plea to a single felony count of first-degree offering a false instrument for filing carries a potential prison sentence of up to 1 to 3 years. County Judge Thomas Breslin scheduled sentencing for Jan. 11 and released Rankins following his plea.

The plea agreement calls for Rankins to pay $132,497 in restitution to the state.

"He always wanted to pay whatever taxes he owed and when state Tax and Finance agreed with our position of a lower tax liability by $60,000 it made resolution attainable," said Paul DerOhannesian II, Rankins' attorney in the criminal case. "That was a big issue all along, even before the criminal case."

Prosecutors did not insist on a determinate period of incarceration as part of the plea agreement. Therefore, the penalty imposed on Rankins will be up to the judge.

Rankins also was indicted in June on a misdemeanor charge that he arranged to have a Times Union reporter assaulted by two brothers from Troy as the reporter left a Guilderland restaurant two years ago.

One of the brothers, Jason Spiegel, pleaded guilty to an attempted assault charge and agreed to cooperate with the investigation. The charges against the second brother, Jerry Spiegel, were thrown out due to procedural errors that a Guilderland town justice said were the fault of the Albany County district attorney's office. No motive for the assault has been revealed by police or prosecutors. The reporter, Steve Barnes, is a senior writer whose duties include writing a blog about the food and beverage industry, including the local restaurant scene.

Wednesday's plea by Rankins to a forgery charge does not have any bearing on the assault case, which remains pending, officials said.

Rankins is a popular bar owner who has operated tavern restaurants in the city dating back years. He has developed close relationships with city officials and police. In January, the Times Union published a story that disclosed that uniformed, on-duty police officers, including high-ranking supervisors, regularly received free meals and drinks at Rankins' Envy Lounge. The department responded by directing uniformed officers not to congregate in restaurants while on duty.

Three months ago, Rankins' attorney filed a motion seeking a special prosecutor on the grounds the district attorney's office had a conflict of interest. The motion alleged that District Attorney P. David Soares and an assistant prosecutor, Christopher Baynes, head of the financial crimes unit, had received complimentary drinks at Rankins' bars. The prosecutors submitted sworn affidavits disputing the allegations. County Court Judge Thomas Breslin has not ruled on the motion.

Rankins, 41, surrendered his state liquor license at the Pearl not long after it was raided by a task force that reported finding more than 200 underage patrons inside. The task force was coordinated by the district attorney's office and included Albany police.

"This defendant believed he was above the law when he operated a bar that catered to minors, but was held accountable and his liquor license revoked," Soares said in a statement. "In this instance, he again believed he was above the law when he taxed his customers, but felt no obligation to turn those dollars over to the state and county of Albany. In these tough economic times where layoffs and reductions in vital services are possible, individuals like Mr. Rankins who defraud the state must be held responsible for keeping funds that belong to the law abiding tax payers."